Smaller, more personalized stores are said to be gaining shoppers' favor

Steve Adams

Monday

Nov 26, 2007 at 12:01 AMNov 26, 2007 at 11:56 PM

Increasing numbers of shoppers say they're more concerned with an enjoyable shopping experience and customer service in a smaller store format than broad selection and low prices.

Knocked off balance by Wal-Mart's aggressive expansion into groceries, many supermarket chains responded by expanding both their grocery and general merchandise selections in the past decade.

Many formed ``store-within-a-store'' partnerships with other retailers, hoping to create a more complete shopping experience by selling toys, books, office supplies and fast food.

But a multi-year industry study indicates that shoppers are steadily souring on sprawling grocery stores. Smaller, more personalized stores are favored by those who place a premium on customer service and an enjoyable shopping environment.

About 35 percent of U.S. grocery shoppers surveyed this year said they're more concerned with an enjoyable shopping experience than traditional concerns such as low prices and convenience, compared with 30 percent in 2002. The survey was conducted by SIRS Inc., a market research company in Fort Mitchell, Ky.

The dollar value of the average supermarket trip purchase dropped 16 percent during the period, partly because of gains by wholesale clubs whose average checks now more than double those of supermarkets ($98 compared with $38).

``One-stop shopping'' was the strategy that informed Stop & Shop's first major store redesign in two decades and set the table for future store expansion. Spanning 1.7 acres, the new prototype store that opened in 2002 on Route 1A in Walpole was nearly twice as big as the first Super Stop & Shop that opened 30 years earlier. Along with groceries, it contained a greenhouse, a one-hour photo department, and sections set aside for Office Depot products, party supplies and housewares.

But the trend toward larger stores is particularly unpopular among the growing segment of the population older than 50, who tend to be less avid shoppers and see few benefits from superstores with 60,000-plus different items for sale, Ohlinger said.

Rather than traditional criteria such as price and convenience, many consumers now choose where to shop based on atmosphere, trust and customer service, the study said.

Another recent survey detected widespread consumer dissatisfaction with the grocery industry. Nearly three-quarters of shoppers nationwide either feel antagonistic to or have no loyalty to their supermarket, according to a survey of 6,000 consumers by the IBM Institute for Business Value.

More than just an economic calculation, grocery shopping is a ``cultural and social event,'' the report said.

``Food and eating are an emotional experience,'' said Melody Badgett, a senior management consultant at the IBM Institute for Business Value. ``It's the way you feed your family, and the interaction around the table encourages customers to really care about quality and food that meets their lifestyle preferences.''

Only 27 percent of shoppers surveyed described themselves as ``advocates'' for their primary grocer, as defined by their willingness to recommend it to friends and keep shopping at a store despite promotional offers from competitors.

Shoppers place a high priority on such factors as availability of employees for assistance and helpful attitudes, Badgett said.

And unpleasant experiences reverberate: The survey indicated that 31 percent of shoppers say they tell acquaintances about a bad grocery shopping experience, and 48 percent of shoppers will avoid a store after hearing about someone else's complaints.

Both surveys gave high marks to Rochester, N.Y.-based Wegmans Food Markets, which wows shoppers with artful merchandise displays and light-hearted touches like clucking animatronic chickens in the poultry section. The chain also has a strong service culture, Ohlinger said.

``They're one of the few retailers given credit for being a wonderfully fun place to shop,'' he said.

Austin, Texas-based Whole Foods Market scored high for such categories as a pleasant shopping environment, knowledgeable employees and high-quality products, trailing only Wegmans in the IBM survey.

``(Whole Foods) has a very strong local market focus and works along the supply chain with farmers and growers to get the right product in stores,'' Badgett said.

Other chains are starting to experiment with smaller innovative designs. Earlier this month, Hannaford Bros. opened a new concept store in Dover, N.H., that could be a template for grocers' future store designs.

At 36,000 square feet, it's about a third smaller than traditional Hannaford stores and six times smaller than the Wal-Mart Supercenter in Plymouth's Colony Place.

But the store has a clever layout that makes shopping easy, said Kevin Coupe, editor of grocery trade publication Morning News Beat. Cream and half-and-half are located next to the coffee section, for instance. Shoppers enter a single ``'' lane that feeds five check-out aisles, eliminating the frustration of picking the slowest moving line.

And a ``go cart curb service'' caters to shoppers with 25 or more items, who can leave their cart with employees who check out items, bag them and carry them out to the customer's car. A wireless device processes a shopper's payments.

British grocery retailer Tesco is targeting the West Coast with Fresh & Easy, a new convenience-store-sized grocery concept. The first six locations opened this month in Southern California. At 10,000 square feet, the stores carry a mixture of name-brand and private-label groceries and prepared meals designed to appeal to time-strapped customers who want healthy food.

``You're seeing a return to the traditional grocer,'' said Kevin Griffin, publisher of the Duxbury-based Griffin Report of Food Marketing. ``The smart retailers are waking up to realize that the mammoth superstore at 90,000 square feet - its day has just come and gone.''

Steve Adams may be reached at sadams@ledger.com.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.